Bankruptcy law

Bankruptcy is a voluntary means of quickly dealing with creditors if the debts you owe are $5,000 or more and will be in place for 3 years with the exception of circumstances where your trustee lodges an objection to the discharge of your bankruptcy and therefore the bankruptcy period may be extended for an additional 5 years.

The process is commenced by the lodgement of a Debtor’s Petition but you may be eligible to apply for alternative legislative agreements to control the situation without the serious implications that come with bankruptcy.

Frequently Asked Questions

Bankruptcy – are you going to take my house?

Your trustee in bankruptcy (the person who is responsible for your financial situation when you are bankrupt) will ascertain what property is to be divided amongst your creditors (the people to whom you owe money) at the date of bankruptcy. This will not include an interest held by another party and is determined on a case by case basis whether your trustee will seek to recover the value of your interest in the house.

Is somebody going to take my belongings?

As at the date of bankruptcy, your trustee will determine what assets (anything of value owned by you) and anything you own during the term of the bankruptcy may be recovered and sold by your trustee. Items which may be retained by you may include the following:

Funds from superannuation policies;

Life insurance policies;

Household and personal effects;

Motor vehicles (depending upon the amount of equity in the vehicle);

Tools of trade used to derive an income

What happens to debts I incur after bankruptcy?

You will be responsible for any debts incurred after the date of bankruptcy.

Creditors are continuing to hassle me, what do I do?

The legislation prevents creditors from recovering their debts from you after bankruptcy though it is not uncommon that often creditors will not document that you have been made bankrupt and you may have to advise them of what has occurred and provide them with your trustee’s details so that they are able to confirm your bankruptcy.

Please contact Hall & Co Solicitors to arrange an appointment to determine what assets are likely to be effected if you decide to apply for bankruptcy or explore the alternatives which may be available to you.